The money game

April 16, 2008

Sens. Barack Obama (D-Ill.) and John McCain (R-Ariz.) have put a high emphasis on ethics in government, sometimes to the chagrin of their stablemates in Washington.

McCain and Sen. Russell Feingold (D-Wis.) co-wrote a 2001 campaign finance law that put new limits on campaign donations, spending and advertising. Obama, in his first year in the Senate, was handed a leadership role on ethics reform.

So why are Obama and McCain trying to play cutesy with the campaign finance system?

Federal law offers tax dollars to presidential candidates who comply with strict fundraising and spending limits. Primary election candidates can get the government to match up to $250 reaped from each private donation. The Democratic and Republican nominees can get up to $84.1 million in public money for the general election -- if they agree not to raise private contributions.

Obama declined to accept matching funds in the primary campaign, but has said he would rely on public financing in the general election -- if the Republican candidate does the same.

McCain also declined to take primary matching funds, though he waited until February to make that decision. Here it gets a little sticky. McCain took out a $4 million line of credit in November from a suburban Washington bank to help him when his fundraising was in dire shape. The question is whether he told the bank he would use federal matching funds to pay back the loan if his own fundraising didn't pick up.

Federal Election Commission Chairman David Mason, in a February letter, called on McCain to assure the commission that he did not use such a promise as a form of collateral for the bank loan. McCain and bank officials insist that wasn't part of their deal.

If McCain had borrowed money in that fashion, such a loan arrangement could force him to accept the spending restrictions of the public financing system.

McCain now says he'll take public financing for the general election -- and he's telling Obama to do the same thing. Obama, though, knows he can raise more money from donors than McCain can. So he hasn't committed to the public system, which would limit the candidates to spending the exact same amount.

Hillary Clinton has opted out of public financing.

We don't blame you if you're confused at this point. The system that is supposed to wean presidential candidates from private fundraising doesn't work. As this campaign shows, it pushes candidates to navigate around arcane government rules. It skews the presidential campaign.

Meanwhile, taxpayers are way ahead of the politicians -- they've been abandoning this system. The money to publicly finance presidential campaigns comes from taxpayers who check off a box on their federal tax return. Check the box and you give $3 to the public-financing system.

Fewer than 7.5 percent of tax filers last year checked "yes" on the $3 contribution box. That's a big slide from the 28.7 percent who participated in 1980.

The campaign finance system has become little more than a distraction. It hasn't created a higher ethical standard in politics or government.